Measures to improve market microstructure

SECURITIES AND EXCHANGE BOARD OF INDIA
SECONDARY MARKET DEPARTMENT
Mittal Court, A Wing, Gr. Floor,
224, Nariman Point, Mumbai 400 021  
 

The President/Executive Director/
Managing Director of all Stock Exchanges
 

Dear Sir,

Sub: Measures to improve market microstructure

With a view to further improve the market microstructure and provide for increased transparency, efficient price discovery and the curb unhealthy market practices so as to enhance the confidence of the investors, SEBI in consultation with members of Inter-Exchange Surveillance Group and some of other Stock Exchanges has decided to implement the following measures :

1. No Exchange shall allow the ‘All or None’ or ‘Minimum Fill’ order facility in their trading system.

 
2. The Price Band applicable to the Normal Trades will become applicable to the Negotiated Trades (including Cross Deals, Bulk Deals and all trades where the price is not determined on the Exchange’s trading system). As of date, the applicable price band is 8% from the previous days close for the normal market on the Exchange. All the regulations relating to the Price Bands for the securities in normal market will also apply to the Negotiated Trades (including Cross Deals, Bulk Deals and all other trades where the price is not determined on the Exchange’s trading system).

 
3. Delivery and payment for all "hand delivery" trades (including Trade for Trade, Negotiated Trades, Cross Deals, Bulk Deals, etc.) must be completed within the time or on the date stipulated when entering into the deal which time shall not be more than 7 days following the date of the contract.

These aforementioned decisions shall be made effective for each stock exchange from the commencement of the first trading period after receipt of this circular. The stock exchanges shall, if necessary, amend their bye-laws for the purpose of implementing these decisions.

Yours faithfully,
 

P. K. BINDLISH
DIVISION CHIEF